Capricorn Copper: Flood brings insurance, environment headaches for 29Metals
Insurance and environmental issues linger for a Northwest copper and silver mine, hangovers from flooding in March.
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A Northwest copper and silver mine inundated with floodwaters earlier this year has reopened but faces environmental and insurance challenges and a slump in production.
In March the wet season in the Gulf of Carpentaria found a second wind and as much as 533mm of rain fell in 48 hours in the Gregory, Leichardt and Nicholson river catchments.
Floodwaters extended south to 29Metals’ Capricorn Copper mine, about 120km north of Mount Isa.
The waters forced operations to be suspended and the mine still has not battled back, posting depressed quarterly results this week.
Ore mined at Capricorn Copper this quarter was still less than half of that mined during the uninterrupted March quarter.
The mine brought in $44.6m in revenue for the March quarter – right before the floods hit – but was only back up to $9.3m this quarter, according to the company’s results.
Between March 6-10 as the rain bucketed down, operations at the mine were suspended.
Ongoing suspensions followed because of 500ml of water going in one mine, and flood damage to the low-lying warehouse, workshop and water treatment facilities.
About 1.5 gigalitres of water settled on the whole site.
There were no health and safety incidents during the floods and no uncontrolled release of mine-affected water from storage.
However, mechanical evaporators brought in to get rid of the water still have work to do.
The results also reveal 29Metals will be appealing a Department of Environment and Sciences decision related to the flooding.
The company intended to increase the allowable level of water in a pit, but the department refused it on a “precautionary principle”, it says in the results.
A $24m insurance payment was made by insurers during the quarter for damage on the surface and for business disruption.
However, insurers have taken the position that “the policy does not respond” to underground loss and damage. 29Metals does not agree with that position, has requested more information and will continue to work with the insurer, it says in the results.
Looking forward, the company is undertaking cobalt feasibility studies and Capricorn Copper, will “dewater” the hardest-hit pit with an eye to restarting operations there in 2024.
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Originally published as Capricorn Copper: Flood brings insurance, environment headaches for 29Metals
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